Kenya agreed to permit the Uganda National Oil Company (UNOC) to import petroleum products via the Port of Mombasa, according to an announcement by Davis Chirchir, Kenya’s Cabinet Secretary for Energy and Petroleum, on 28 March. The announcement comes in the wake of a meeting between the presidents of Kenya and Uganda last month, where both leaders committed to settling a longstanding dispute over oil imports.
The arrangement aims to amicably resolve tensions between the two neighboring countries that were sparked by a petroleum import system which Uganda deemed unfair.
For decades, Uganda has been importing 90% of its petroleum products through Kenyan oil marketing firms, which would then distribute these products to their subsidiaries in Uganda. However, in November 2023, Uganda accused intermediaries in Kenya of causing a 58% surge in oil prices, which President Yoweri Museveni said inflicted significant financial damage on the country. The Ugandan government also highlighted the risk of supply disruptions stemming from reliance on oil from Kenya, which could make the country vulnerable during supply shortages.
In response, Uganda began exploring alternative import routes, including through a port in Tanzania, and negotiations for exclusive supply arrangements with Vitol, a major global energy trader. The agreement with Kenya offers a new pathway for Uganda to import its petroleum products, potentially enhancing energy security and economic stability in the region.
According to the agreement, UNOC will receive access to Kenya Pipeline Company’s infrastructure.
“You will see UNOC getting a license and then we will see how to work together,” Chirchir was quoted as saying, signaling a forward-looking approach to bilateral cooperation on energy matters.